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M/s Alcatel-Lucent France And Another Versus Assistant Director of Income Tax

2016 (6) TMI 301 - DELHI HIGH COURT

Reopening of assessment - existence of PE in India to which its profits are attributable - software income earned by ALF was taxed as royalty income under the provisions of the Act and the tax treaty - date of execution of the agreement with Indian customers was not taken into account - Held that:- The desperate attempt by the Revenue at trying to infer the failure to disclose material particulars because of the inconsistent stand of ALF on whether it has a PE in India deserves to be rejected. R .....

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iculars only because ALF continued with its stand of not having a PE in India. In any event this was known to the AO and yet in the reasons recorded for reopening the assessment this is not referred to as a failure on the part of ALF to disclose true and material particulars.

The reasons for reopening the assessment for AY 2004-05 do not made any reference to Section 44DA(1). Although it has been mentioned in the reasons for the other three AYs in question, this was not an issue that .....

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e Revenue and at every stage to correct the errors of AOs which could have easily been avoided had there been a proper discharge of the statutory duty. Once that legal perspective is kept in view, repeatedly invoking Section 147 of the Act on the same materials, only because there is no statutory bar against it, would constitute an abuse of the process of law.

The Court would also like to observe that it is extraordinary that Sections 147 and 148 of the Act have been invoked by the Re .....

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sufficient as far as the legal requirement is concerned. It has been repeatedly held by the Court that the mere repeating of the words in the statute is hardly sufficient compliance - Decided in favour of assessee - W. P. (C) 1938/2013 & CM No. 3684/2013 - Dated:- 27-4-2016 - S. Muralidhar And R. K. Gauba, JJ. For the Petitioners : Mr C.S. Aggarwal, Senior Advocate with Mr Prakash Kumar, Advocate For the Respondent : Mr Zoheb Hossain, Standing Counsel W.P.(C) 1967/2013 & CM No. 3747/2013 W. .....

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8/2015 & CM No. 5371/2015 W.P.(C) 3000/2015 & CM No. 5375/2015 JUDGMENT Dr. S. Muralidhar, J: 1. This judgment is common to sixteen writ petitions filed under Article 226 of the Constitution of India by companies belonging to the Alcatel-Lucent group. Four of the writ petitions are by M/s. Alcatel-Lucent France ( ALF ), five by M/s. Alcatel-Lucent Bell NV ('ALB'), five by M/s. Alcatel-Lucent Enterprise ('ALE') and the remaining two by M/s. Alcatel-Lucent Canada ('ALC& .....

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Lucent France 2. To begin with the Court proposes to discuss in some detail the facts concerning ALF. As already noticed, the facts concerning the other Petitioners are more or less similar, and will be adverted to in brief at the appropriate stage in this judgment. 3. ALF, a company incorporated under the laws of France, through its authorised signatory Mr. Nitin Gupta has filed four of these writ petitions, viz., W.P.(C) Nos. 1938/2013 (concerning AY 2004-05), 1862/2014 (concerning AY 2005-06) .....

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entered into between India and France. ALF contends that it is entitled to be governed by the DTAA to the extent that the DTAA is more beneficial to it. ALF states that it supplies telecommunication equipment (hardware) along with software from outside India to various telecom companies in India. The case of ALF is that it has no Permanent Establishment ( PE ) in India. 5. As far as AY 2004-05 is concerned ALF states that apart from providing services to Alcatel-Lucent India (hereafter 'ALI& .....

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5% in the absence of PE in terms of rates specified under the DTAA. 6. For AY 2004-05, ALF filed its return of income on 28th October, 2004 declaring an income of ₹ 1,16,01,630/-. For AY 2005-06, ALF filed its returns on 20th August, 2005 declaring an income of ₹ 2,93,05,860/-. For AY 2006-07, ALF filed its returns of income on 14th October, 2008 declaring a total income of ₹ 8,15,59,098/-. None of these returns was picked up for scrutiny. 7. A survey was conducted in the premi .....

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which replies were filed by ALF. 8. Separate assessment orders were passed by the Assessing Officer ('AO') on 23rd March, 2010 under Section 148 read with Section 143(3) of the act for the four AYs, i.e., 2004-05, 2005-06, 2006-07 and 2008-09. It may be noticed at this stage that for some reason the Revenue did not issue a notice under Section 148 of the Act to ALF as regards AY 2007-08. The order passed by the Assessing Officer ( AO ) for AY 2006-07 (forming subject matter of W.P.(C) 29 .....

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acts by furnishing inaccurate particulars. On this basis the AO also passed similar but separate assessment orders dated 23rd March 2010 for AYs 2004-05, 2005-06 and 2008-09. 10. The said assessment orders dated 23rd March 2010 were reversed by the Commissioner of Income Tax (Appeals) [ CIT(A) ] by a common order dated 29th September 2012 for AYs 2004-05 to 2006-07 and 2008-09. The CIT (A) accepted the plea of ALF that the supply of hardware and software was an integrated one and that the softwa .....

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butable to India PE. The alternative submission of ALF was that in case the software supply is held to be royalty then such a receipt should be held as effectively connected to the PE and should be taxed same way as the hardware i.e., by attributing 2.5 % deemed net profit rate to the PE and thereby taxing the total supplies at the rate of 1%. In para 6.2 of its order dated 29th September 2012, the CIT (A) held that the profit attributable to the PE of ALF in India in respect of sale of hardware .....

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s Court in DIT v. Ericsson A.B.(supra). This decision dated 4th April, 2014 of the ITAT was upheld by this Court by its order dated 27th February, 2015 in ITA No. 119/2015 (CIT v. Alcatel Lucent Canada). 12. However, even during the pendency of the above appeals at various stages, notices under Section 148 of the Act came to be issued by the Revenue to ALF seeking to reopen the aforementioned assessments for AYs 2004-05, 2005-06, 2006-07 and 2008-09.The notice for AY 2004-05 was issued on 30th M .....

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to AY 2004-05. The reasons read as under: "Reasons recorded for issue of Notice u/s 148 of the Income Tax Act, 1961 in the case of M/s. Alcatel- Ay 2003-04 (Sic 2004-05) 29.03.2011 The assessee is a company incorporated under the laws of France and is the supplier of hardware and software products for GSM cellular radio telephone system. During the relevant year it had supplied telecommunication hardware and software to various customers in India. The assessee had filed return of income cla .....

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account which resulted into an underassessment of the income of the assessee for the A.Y. 2004-05. This also satisfies the pre-requisite condition stated under explanation 2 to section 147. Relevant portion of section 147 of the Act reads as below: ........... In view of the above, I have reason to believe that the income of the assessee for A.Y. 2004-05 chargeable to tax has escaped assessment. In this case, not more than six years have elapsed from the end of the relevant Asstt. Year (i.e. A.Y .....

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for AY 2003-04 13. At this stage it is necessary to digress to a discussion of the facts for AY 2003-04. By an order dated 30th March 2006 for the said AY, the AO disagreed with the contention of ALF that it had no PE in India. The AO accordingly held that the software income earned by ALF had to be treated as royalty income under the Act as well as the DTAA. A specific reference was made to Clause (c) (ii) under Explanation 2 of Section 147 (ii) (c) of the Act, while stating that in deciding t .....

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under Section 9(1)(vii) of the Act or the relevant provisions of the DTAA. The further appeal by the Revenue against the said order dated 13rd August, 2010 of the CIT(A) for AY 2003-04 was dismissed by the ITAT by the same common judgment dated 4th April 2014 by which it dismissed the Revenue's appeals for the AYs 2004-05, 2005-06, 2006-07 and 2008-09. This decision dated 4th April, 2014 of the ITAT was upheld by this Court by its order dated 27th February, 2015 in ITA No. 119/2015 (CIT v. A .....

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sment. The 'reasons to believe' recorded by the AO preceding the issuance of the said notice reads as under: "The assessee is a company incorporated under the laws of France and is the supplier of hardware and software products for GSM cellular radio telephone system. During the relevant year it had supplied telecommunication hardware and software to various customers in India. The assessee had filed return of income claiming that the assessee does not have a permanent establishment .....

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the assessee for the A.Y. 2003.04. This also satisfies the pre-requisite condition stated under explanation 2 to section 147. Relevant portion of section 147 of the Act reads as below: ........ In view of the above, I have reason to believe that the income of the assessee for A.Y. 2003-04 chargeable to tax has escaped assessment. In this case, not more than six years have elapsed from the end of the relevant Asstt. Year (i.e. A.Y. 2003-04) and income of more than 1 lakh has escaped assessment, .....

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his Court. In a judgment dated 15th May, 2012 in the said writ petition (Alcatel-Lucent France v. ADIT), this Court concluded that in the original assessment proceedings under Section 143(3) of the Act (i.e. for AY 2003-04) the question of taxability of income as well as the rate of tax had been specifically examined. The Court held that ALF disclosed the said income in its revised return. In the assessment order dated 30th March 2006, it had been held that the fee for licensing of the software .....

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reconsideration of the some facts would not justify initiating the reassessment proceedings. Accordingly, the notice dated 31st March 2010 under Section 148 of the Act for AY 2003-04 as well as the order dated 5th December 2011 rejecting ALF's objections thereto were quashed by the Court. The aforementioned judgment dated 15th May 2012 in W.P.(C) No. 8739 of 2011 does not appear to have been challenged by the Revenue. Re-opening of the assessment for AYs in question 18. Now reverting to the .....

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re void ab initio. Thereafter, a further notice dated 22nd November 2011 was issued to ALF under Section 142(1) wherein ALF was called upon to file its return of income to which it replied on 14th December 2011 stating that its original return may be treated as compliance with the notices under Section 142(1)/148. ALF also requested for the reasons for initiation or reassessment proceedings under Section 147 of the Act. ALF was thereafter provided with a copy of the reasons. 19. The objections b .....

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ions. The first concerned ALF not having received the notice dated 30th March 2011 under Section 148 of the Act. Since this plea was negatived and not further urged, it need not be discussed at this stage. The second was that by the order dated 15th May 2012, the High Court already quashed similar notice for AYs 2003-04. According to the AO, there was no similarity of the facts in W.P.(C) No. 8739 of 2011 since the assessment order dated 30th March 2006 for that AY i.e., 2003-04 had reproduced a .....

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issue of taxation of royalty income under Article 13 or any particular paragraph of the said Article of India-France DTAA or that the issue was examined or even considered by the AO. Further, according to the AO, the issue as to the effective connection of the royalty to the PE was not examined. One more objection of ALF which was considered by the AO was the third proviso to Section 147. Here again, the AO simply discussed the order of the CIT(A) without taking into account all the facts, viz., .....

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edings. Similar interim orders were passed in the other writ petitions. Replies have been filed by the Revenue and rejoinders thereto have been filed by ALF. Submissions of counsel 23. Broadly the submissions of Mr. C.S. Aggarwal, learned Senior counsel for ALF is that reopening of the assessment was sought to be done merely on a change of opinion since the assessment orders earlier passed under Section 148/143 (3) were after a detailed examination by the AO of whether there was any concealment .....

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ided in favour of the ALF. Fourthly, it was submitted that there was no fresh tangible material for the formation of the reasons to believe. 24. Reliance was placed on the decisions in Ritu Investments (P) Ltd. v. DCIT (2012) 345 ITR 214 (Del), Atma Ram Properties (P) Ltd. v. DCIT (2012) 343 ITR 141 (Del) and CIT v. Kelvinator of India Ltd.(2010) 320 ITR 561 (SC). 25. Replying to the above submissions, Mr. Ashok Manchanda, learned Senior Standing counsel and Mr. Zoheb Hossain learned Junior Stan .....

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ed as far as the question concerning the treatment of the income for the sale of software as income for royalty. However, the CIT (A) concurred with the AO that ALF did have a PE in India and it was on that basis that there was attribution of profits to the PE with the direction to the AO to tax the gross receipts at 2.5%. Yet, while filing the return in response to the notices under Section 148 in the second round, the ALF continued to maintain that it had no PE in India. This in itself would c .....

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ove AYs, Mr Manchanda submitted on the strength of the decision in Biju Patnaik (supra) that as long as the material on the basis of which the reasons to believe had been formed was available in the record and that record was before the Court, it could not be said that the reopening of the assessment on that score was not legally permissible. Analysis and reasons 27. The above submissions have been considered. The Court finds that there is no answer given by the Revenue to one of the main ground .....

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is section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, u .....

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subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1.-Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.-For the purposes of this section, the following shall also be deemed to be cases where income char .....

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income or has claimed excessive loss, deduction, allowance or relief in the return ; (c) where an assessment has been made, but- (i) income chargeable to tax has been underassessed ; or (ii) such income has been assessed at too low a rate ; or (iii) such income has been made the subject of excessive relief under this Act ; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed. Explanation 3.-For the purpose of assessment or reassessment under t .....

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matter of further scrutiny in an appeal that is pending. In the present case, the orders initiating the reopening of the assessments were passed even when the appeals against the assessment orders were pending either before the CIT(A) or ITAT. The said determination by the AO in the earlier assessment proceedings was, at the time of issuance of the second round of notice under Section 148 of the Act, still the subject matter of the appeal before the CIT(A). In other words, these notices were is .....

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the ITAT in those pending appeals was rendered on 4th April 2014. The third proviso to Section 147 of the Act mandates that the AO would not assess or re-assess income involving matters which are the subject matter of any appeal, reference or revision . This mandate of the third proviso to Section 147, which was inserted with effect from 1st April 2008, appears to have been completely overlooked by the AO when he proceeded to issue the notices under Section 148 of the Act for the above AYs. 29. .....

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ated 23rd March 2010 it was held that the assessee had a PE in India to which its profits are attributable (iii) the software income earned by ALF was taxed as royalty income under the provisions of the Act and the tax treaty (iv) while deciding the tax rate, the date of execution of the agreement with Indian customers was not taken into account (v) this resulted in an underassessment of the income of ALF for AY 2004-05. Therefore, again a reference is made to Clause (c) (ii) under Explanation 2 .....

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s noticed by this Court in its order dated 15th May 2012 while quashing an identical notice for AY 2003-04, the reasons do not refer to any new fact coming to the knowledge of the AO after the completion of original assessment proceedings. 30. It also requires to be noticed that the original assessment proceedings for AYs 2004-05, 2005-06, 2006-07 and 2008-09 were under Sections 148/143(3) of the Act. The AO, should therefore, be presumed to have examined in some detail whether there had been an .....

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t in Kelvinator India (supra) and in particular the following extract: "On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under the above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act (with effect from 1st April, 1989), they are given a go-by and only one condi .....

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annot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review ; he has the power to reassess. But reassessment has to be based on fulfilment of certain preconditions and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of "chan .....

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iament not only deleted the words "reason to believe" but also inserted the word "opinion" in section 147 of the Act. However, on receipt of representations from the companies against omission of the words "reason to believe", Parliament reintroduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote hereinbelow the relevant portion of Circular No. 549 dated October 31, 19 .....

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t rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression 'has reason to believe' in place of the words 'for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however, remain the same."" 32 .....

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ua non. In Ritu Investments v. DCIT (supra), the Court took note of the fact that the AO would not get jurisdiction to reopen the assessment only on the basis of mere error of judgment . The Court referred to the decision in Gemini Leather Stores v. Income Tax Officer, B-Ward, Agra (1975) 100 ITR 1 (SC), and held that when the AO had all the material facts before him he could not take recourse to Section 147(a) to remedy the error resulting from his own oversight . Reference was also made to the .....

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al facts and not where the AO fails to apply the relevant law. There can be no doubt that as far as the present case is concerned, the reasons do not refer to any failure on the part of ALF to disclose any material when it filed its original return or even the return pursuant to the earlier notices issued under Section 148 of the Act. 34. Mr Manchanda for the Revenue placed considerable on the following passage in the decision of this Court in Usha International (supra): "25. Thus if a subj .....

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on a subject matter, entry, claim, deduction. When the Assessing Officer fails to examine a subject matter, entry, claim or deduction, he forms no opinion. It is a case of no opinion." 35. As far as the present case is concerned, a perusal of para 8.2 of the order dated 23rd March 2010 for AY 2006-07 reveals that the issue concerning the treatment of the income from the sale of the embedded software as royalty has been dealt with in detail. It cannot, therefore, be said that no opinion was .....

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(supra) that in the first instance there was no opinion formed by the AO. 36. In fact, in the order rejecting the objections preferred by the ALF, the AO rejects this plea only on the ground that the earlier orders only made a cursory reference to the issue. This understanding by the AO of what constitutes reasons for reopening an earlier assessment order is both factually and legally erroneous. As long as the earlier assessment order made a reference to an issue, it did not matter, as far as th .....

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failure to disclose material particulars because of the inconsistent stand of ALF on whether it has a PE in India deserves to be rejected. Reasons for the second time were recorded by the AO on 14th March 2013 for reopening the assessment for AY 2006-07 and 13th March 2013 for AY 2008-09. This was after the order dated 29th September 2012 of the CIT(A) which negatived the plea of ALF that it had no PE in India. The AO was aware that ALF was nevertheless maintaining its stand that it did not hav .....

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s been a failure by ALF to disclose material particulars. This is certainly not sufficient as far as the legal requirement is concerned. It has been repeatedly held by the Court that the mere repeating of the words in the statute is hardly sufficient compliance. Reference in this regard may illustratively be made to the decision dated 8th October 2015 of this Court in W.P.(C) 1873 of 2013 (Oracle System Corporation v. Dy. Director of Income Tax) and the decision dated 18th December 2008 in W.P.( .....

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[1986] 159 ITR 956(SC). 40. Mr. Manchanda, learned counsel for the Revenue, sought to develop another line of argument referring to the second proviso to Section 147 which states that the first proviso would not apply where any income in relation to any asset (including financial interest of any entity located outside India) chargeable to tax has escaped assessment for any assessment year. This according to him has to be read along with Clause (d) of Explanation 2 which states that for the purp .....

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to the case in hand. Mr. Manchanda tried to urge that the income by way of royalty as a result of the sale of embedded software should be held to arise from the intellectual property held by ALF outside India. As already pointed out, this does not constitute the reasons for reopening the assessment. This has been suggested only at the stage of arguments before this Court. The Court will only have to go by what there is on record as regards the 'reasons to believe' for the purposes of Se .....

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ginal assessment order to the applicability of Section 44DA(1) of the Act which was specifically referred to by the AO when he formed the reasons for reopening the assessment. 43. The reasons for reopening the assessment for AY 2004-05 do not made any reference to Section 44DA(1). Although it has been mentioned in the reasons for the other three AYs in question, this was not an issue that arose for the first time based on any tangible material that came to the notice of the AO subsequent to the .....

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n a proper discharge of the statutory duty. Once that legal perspective is kept in view, repeatedly invoking Section 147 of the Act on the same materials, only because there is no statutory bar against it, would constitute an abuse of the process of law. 44. The Court would also like to observe that it is extraordinary that Sections 147 and 148 of the Act have been invoked by the Revenue not once but twice in respect of the same Assessee and on the same set of facts and same reasons. The Court h .....

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hereby quashed. The writ petitions of ALF are allowed but in the circumstances with no orders as to costs. Facts concerning ALC 46. The facts, concerning the other petitions are mentioned at this stage only to highlight that the issues involved in them are identical to those in the petitions by ALF. Consequently, the decision in their petitions cannot be any different. 47. As far as ALC is concerned, notices under Section 148 were first issued on 8th January 2010 in relation to AY 2005-06 and A .....

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Y 2006-07. 48. The AO proceeded to pass separate assessment orders under Section 148 read with 143(3) dated 23rd March 2010 for AYs 2005-06 and 2007-08 computing the total income of ALC at ₹ 17,43,129 for AY 2007-08, at ₹ 3,20,41,442 for AY 2005-06. The AO held that ALC had a PE in India and that software supplies will be taxed as royalty. ALC filed an appeal before the CIT(A) against the order of the AO on 21st April, 2010 for both the aforementioned AYs. 49. Even while the appeal w .....

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letters dated 22nd May, 2012 and 2nd December 2013, ALC sought the reasons recorded prior to initiation of the reassessment proceedings under Section 147/148. 50. Meanwhile the CIT(A) passed a common order dated 29th October 2012 in the appeals against the assessment orders dated 23rd March, 2010 pertaining to AYs 2003-04 to 2008-09. The CIT(A) further held that software receipts were not taxable as being in the nature of royalty and attributed 2.5 % net profit on the entire receipts (hardware .....

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ned AYs requiring ALC to furnish certain information and present itself at the office of the AO. The AO provided ALC with a copy of the reasons recorded for reopening of assessment by letter dated 16th January, 2014 to which ALC filed detailed objections by a letter dated 18th February 2014 to the validity of the initiation of reassessment proceedings under Section 147 and requested the AO to dispose of the said objections by passing a speaking order. Thereafter, the AO passed the impugned order .....

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d AYs. The AO then passed separate assessment orders dated 23rd March 2010 computing the income of ALB at ₹ 45,60,020 for AY 2004-05; ₹ 48,80,614 for AY 2005-06; ₹ 45,02,671 for AY 2006-07; ₹ 88,437 for AY 2007-08 and ₹ 9,03,620 for AY 2008-09. ALB also filed appeals before the CIT(A) on 21st April, 2010 against the orders of the AO for each of the aforementioned AYs. 54. Even while the appeals were pending, the impugned notices under Section 148 dated 30th March, 2 .....

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ish a return of income. 55. ALB then wrote a letter dated 14th December 2011 stating that the return of income filed originally in response to the earlier notice under Section 148 may be considered as its return in compliance with the impugned notice dated 30th March 2011 in AY 2004-05. By the same letter, ALB also requested for intimation of the reasons recorded by the AO for initiation of the proceedings under Section 147 of the Act which were accordingly furnished to the Assessee. Thereafter, .....

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to the above, enclosing a copy of its letter dated 14th December 2011. ALB then filed detailed objections on 4th July 2012 to the initiation of the reassessment proceedings under Section 147 of the Act for AY 2004-05. In relation to the other AYs as well, ALB filed detailed objections to the initiation of proceedings under Section 147. 57. Meanwhile, the CIT(A) passed an order dated 21st November 2012 pertaining to AY 2004-05; an order dated 5th December 2012 pertaining to AYs 2005-06, 2006-07, .....

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n order dated 28th February 2013 for AY 2004-05, dated 11th March 2014 for AYs 2005-06 and 2007-08; and dated 4th March 2015 for AYs 2006-07 and 2008-09, rejecting the same. Hence, ALB filed WP (C) No. 2016 of 2013 pertaining to AY 2004-05, WP(C) No. 1863 of 2014 for AY 2005-06, WP(C) No. 2998 of 2015 for AY 2006-07, WP (C) No. 1871 of 2014 for AY 2007-08 and WP (C) No. 2997 of 2015 pertaining to AY 2008-09 challenging the impugned notices under Section 148 and the orders disposing of the object .....

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the case of ALF for the AY 2006-07, being on similar facts, should not be relied upon and an order passed in the case of ALE for the aforementioned AYs. 60. ALE sought to rely on the submissions made by ALF in the case pertaining to AY 2006-07. On 23rd March, 2010 the AO passed separate assessment orders under Section 148 computing the total income of the Assessee at ₹ 7,53,22,740 for AY 2004-05, ₹ 4,48,20,790 for AY 2005-06, ₹ 6,52,19,674 for AY 2006-07, ₹ 11,19,02,284 .....

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er dated 2nd May 2012 and then filed a letter dated 22nd May 2012 where it requested the AO to consider the earlier returns filed by it as compliance with the new notice dated 23rd March 2012. 62. The CIT(A) passed an order dated 21st November 2012 in the appeals for AYs 2002-2003 to 2008-09 whereby it was held that software receipts are not taxable in the nature of royalty and attributed 2.5% net profits on the entire receipts (hardware and software) as profits attributable to the PE. By letter .....

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